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A Professional Employment Organization or a Registered Employer?
PEO vs EOR
A PEO is a professional employer organization. PEOs provide HR benefits to small and mid-size companies. This can include payroll and benefits, HR, tax and regulatory compliance. According to their national organization, PEOs serves around 175,000 (Apporx) companies in the U.S. each year.
AN EOR is an employer of record. These organizations do all the things a PEO can do plus become the official company that hires your workers. This is a huge point of differentiation between the two types of services. An EOR is a legal employer, and they hold all of the liabilities of hiring, employing, and terminating workers.
You should choose PEO if:
- If you usually strive to get officially registered business locations.
- When you need to considerably reduce the office work present in the human resources department and the administrative tasks.
- Seriously considering growing within the United States of North America.
- Desire is to employ 5-10 employees within your company.
- It’s not easy for you to comply with insurance and you need to get assistance to comply with labor regulations.
You must choose EOR if:
- Looking to grow internationally, but right now you have a limited budget.
- You are considering experimenting with different markets, but don’t want to make a legal commitment.
- Want to externally manage the work part of your company.
- Plan to grow your business gradually and want to start with few employees.
- If you are already fully prepared to delegate your responsibilities as an employer.
PEO is ideal for North American companies that want to expand to other states and legally comply with all legal employment regulations. However,
EOR is the right choice to move to the international arena, as it provides greater legal protection and behaves like a trusted partner with a new business location.